Corporate Finance soundbite: Mergerspresso

Lucy Robson 

Summer in the City! 

Summer is the perfect time to look inwards and look ahead to the rest of the year. And in that light, UK Finance held their annual M&A Conference just recently and I'm absolutely thrilled that on today's Mergerspresso we are joined by Julie Shacklady, Director and Primary Markets and Corporate Finance at UK Finance, and Giles Distin of Addleshaw Goddard. And we're going to chat through the key themes that came out of the conference. Julie, absolutely delighted to have you here. How would you sum up the mood in the room… and what do you think is driving that mood?

Julie Shacklady 

So first of all, I should say thank you for having me! Turning to the mood… the mood was incredibly buoyant, but you how could it fail to be given your amazing offices? I've never heard a speaker before refer to “office envy”. There was a good deal of optimism, and I think that's reflective of the deal making environment. 2025 was a really busy year for M&A and deal activity this year remains incredibly active. I hear that total global transaction volumes are on track to exceed $4 trillion and that's even bearing in mind the geopolitical backdrop. We heard that there's really strong continued interest from overseas buyers and a good spread of interest across the sectors.

Giles Distin

Julie, I agree. Lots of positivity from all quarters and I agree that's likely partly a result of a very busy M&A year last year in the UK and indeed worldwide. And whilst M&A volume in the UK has been slightly more subdued in the first half of this year, average deal values are significantly up, including several significant public company takeovers with both strategics and PE firms continuing to play across the value range.

So there's good reason to be positive about the UK as a destination for M&A, although sometimes people can't always see the positives in that: there is some concern about foreign acquirers buying our companies, particularly our most cherished listed companies. But there are positives in that as well. There are businesses looking to grow, to invest and to innovate. And that doesn't just mean through merging with other UK businesses.

Julie Shacklady 

Yeah. And I think I would just add that opportunity for businesses to scale. M&A is a really, really important factor there.

Lucy Robson

I think that's very, very fair. And one of the themes which kept coming up from the Takeover Panel, from antitrust regulators, and actually the shareholder side as well, was the theme of pragmatic and proportionate regulation. So how do you see that continuing to evolve, Julie?

Julie Shacklady

Ahh, the famous “Four P's”! The mood music here continues to be positive. I think it's fair to say the Code has always been particularly responsive to shifts in the market, with the latest changes focusing on things like stub equity (and bit of a blast from the past for me). And there was certainly a feeling in the room that the CMA's new approach is making a difference. Looking a little bit more into the detail, we're hearing that the CMA's briefing paper process is working really well. And that's back to that framing of positivity again. An earlier steer on potential issues helps deal makers to plan and ultimately to get the deal done. We're also hearing a lot about how cooperation between a clutch of key international regulators on merger control is critical to getting the deal done. But if we take a bit of a step back, you say a lot about the reform agenda for listings and Giles, you've touched already a little bit on the equity story or the reform agenda for equity over the last couple of years. Now, that has been incredibly positive, but there's very little said about the CMA and the Panel’s reform agenda. And I'd also mention within that bucket the Cabinet Office, who cover the screening regime for the investment. Now that reform agenda has also been incredibly active and there have been some really positive changes to ensure that the relevant regimes are focused and with more transparent processes. At UK Finance, we're very hopeful that this direction of travel will continue.

Lucy Robson

And certainly anecdotally, we're hearing that that change in mood and that sense of pragmatism is really helping. But Giles, what's your take on things?

Giles Distin

Yeah, I mean, again, I saw lots of positivity coming out of the conference in respect to the way regulators in the UK and in the EU are adopting new, more proportionate regulations or arguably irrespective of new regulations, where regulators are behaving simply in a more proportionate fashion, potentially with an eye to the UK's competitiveness in an international landscape. 

I think the UK can make much of that competitive position. Of course, the Takeover Panel often comes out shining on this topic with their pragmatic and timely approach in dealing with issues. But there's reason to believe that if politicians amongst others genuinely keep a focus on international competitiveness, that the broader range of UK regulators won't be influenced to gold plate their application of UK regulation. Keeping stock market regulation proportionate will remain vital to the UK's economic health, but lots more remains to be done including the need to press on in a very timely fashion with the digitalisation and tokenisation of our markets and our money, and addressing other issues and regulations or practices that might be currently negatively influencing funds flowing into UK equities.

Julie Shacklady

I couldn't agree more on those. We obviously saw Chris Willard's first report published last week. Certainly, the digital gilt is something that UK Finance has long advocated for as a way of putting a real stamp that the UK is open for business and is a leader in tokenisation.

Lucy Robson

Just picking up that broader theme of London's competitiveness and the UK's place in the world, there's a lot of discussion at the moment on the need for a narrative for London and to understand what it will stand for in its next chapter. What takeaways did you both have on London's place in global markets?

Julie Shacklady

As Giles has said, there's already been a huge reform agenda on the equity markets, but I think it's important to look at that broader perspective. I mean London remains an open international market with lots of positives supporting it: a strong ecosystem, helpful time zone, common law, English language, a hub for talent. We've been on that journey over the last five years. There will always be challenges and we always need to keep reassessing our position. Let me just quickly read you something from a report I was looking at recently:

“This report contains a chilling fact that if we do nothing within 10 years, while we will remain a leading regional financial centre, we will no longer be the financial capital of the world. We must take a cold hard look at the industry, identifying our weaknesses, learning from the best practices of other nations and drawing upon strategies that will allow us to adapt to the changing realities of the market.”

Doesn't that sound familiar? But it wasn't about London. It was in a report commissioned by the US Senate and the then mayor of New York, 20 odd years ago. The key, as that and more recent London focus reports points out, is for government regulators and industry to work together. And that's what we've been doing in spades. We just need to keep going.

Giles Distin

I think lots of participants in the conference will have come out with different takeaways on this particular point. But my broad sense was that many people are very aware that we can't be complacent regarding London's position in an ultra-competitive and sophisticated global marketplace. That is, you know, whatever we've been known for or brilliant at in the last 10, 20, 30 years, won't remain sacrosanct in the coming 10 years. And what you've said there, Julie, really chimes with me in that report. I'll come back to that in a minute. I think there are very many people who are very enthusiastic about London, about the progress that it's made in the recent past to get itself back to match fitness and about continuing to focus on improving the frameworks here in which we execute on M&A and capital markets business. 

Indeed, there's a lot to be positive about in London, as you've already said, Julie, things like our position in the middle of global time zones, lead language of business, trusted legal framework, courts and regulators, which are respected internationally, a large and hopefully knowledgeable advisory community. Let's not forget our leading positions in areas like FX, commodities, bonds, insurance. And I think there's also a good amount of positivity. We've already mentioned it in relation to the UK being a positive environment in which to execute M&A, albeit with much more to do in respect of our capital markets. But I also think there's a decent groundswell behind the idea that we all need to focus on talking more positively about London. And perhaps whilst talk only goes so far, it can be damaging for the City and for the UK if we spend our time talking ourselves down. And that's a joint responsibility on all of us to focus on an investment led global narrative and that includes professional advisors, company Boards, PE firms, regulators, politicians, members of organisations like UK Finance and advocacy groups. And I'd petition listeners to become an active participant in that positive narrative. 

And on that point, I'd also shamelessly plug a recent report which Addleshaw Goddard has commissioned and contributed to on the future of the City of London, which looks at, amongst other things, at the vital importance of contributing to that positive narrative in the City. And maybe that also includes by participating in organisations like UK Finance.

Julie Shacklady

Can I just add one other thing as well? It's relevant to both M&A and IPOs and it's not just about industry (you articulated that wonderfully about how industry, government regulators working together can drive change). But it's also about looking at the industry holistically and not looking at reform from the perspective of specific buckets. And the example I'll give here is the changes that were announced, the Government Growth Guarantee Scheme, last week at Mansion House to support the SME community, as you and I know really well. Based on a strong M&A market, but also a strong listings market, we need that strong pipeline of companies for companies to be able to scale. They need that capital. The Bank of England's reforms to bank capital sit in this bucket as well. It's about looking at everything holistically. 

And while I'm on the theme of looking at things holistically, it was great to hear from the Office for Investment at our conference about the role that they're playing and for being that front door for investment into the UK for the whole of government and that's also incredibly important.

Lucy Robson

I think that point about London and the UK not doing itself down and bringing it’s kind of whole self, you know, whether it's London or whether it's regionally, is absolutely critical. And yeah, I think there's a superb story to be told. It's really just a case of articulating that. I think on the conference, thinking back, was there one conversation, was there a particular soundbite from the conference, that has really stuck with you?

Julie Shacklady

So, the first is purely a personal level. It was really interesting to hear that reiterating view that in a world of AI, judgment is still important. And that gave me comfort for both my career path and for the career path of my children. Giles, had you any thoughts on that?

Giles Distin 

Yeah, I mean, the expression came up, “a computer can never be held accountable”. And that's something which must be on all of our minds as we think about the impact of AI, including on what that means for M&A. And we're all trying to find our way at the moment, aren't we? But hopefully with that belief that human beings will be essential for a long time to come in the world of M&A.

Julie Shacklady 

Absolutely. From an industry perspective for me, I loved this assessment of stewardship on a deal and I'm going to quote it as well as I possibly can. “It's about ensuring the right price for the buyer, seller and shareholders, ensuring like a birthday party, everyone goes home with a balloon.” In other words, that everyone goes away happy. And that really stuck in my mind because that's critically important, not just for an M&A transaction, but more broadly in the business world, making sure that everyone's happy and in real life more generally.

Lucy Robson

I like that one as well. I like that idea that the best deals are the ones where there's something in there for everybody. I think that brings out, know, the fact that is sometimes lost, which is that done well, M&A is absolutely vital for growth. And it can be a real accelerator and really transformational. 

Giles Distin 

I like that soundbite that you mentioned about a balloon and just continuing on that theme of children's parties, one of the expressions I heard was, “PE can't keep playing pass the parcel”. And that was in, I think, the panel session on private capital and public capital. And I think that really resonated with me in that I believe there is a growing sense that the UK's public equity markets and IPOs will need to return and PE can't continue just to go from secondary buyout to secondary buyout or to continuation funds. I think there was a positivity in the room and an expectation regarding IPOs coming up. Obviously in the UK, we don't know what the timeframe is for that, but certainly a good sense across the conference that IPOs will be returning.

Julie Shacklady

Yeah, and we certainly, certainly the feeling we get from our members that that's a really strong pipeline. And that's obviously good because you're then replenishing the market.

Lucy Robson

I've heard it said before that, IPOs start with the intention and the intention is now clearer than it has been for quite some time, which has to be encouraging for all of us. I think that takes us well onto that concept of IPOs returning takes us to, what markers, what developments will you be keeping an eye out for through the rest of the year?

Julie Shacklady 

There are a couple of things for me, but there was this recurrent theme and that's about how markets keep evolving and how different parts of the market borrow from each other. I'm now going to do a shameless plug for a report that I did last year on public and private market. Sorry, couldn't help myself!

We wrote there about the increasing convergence of public and private markets. In the sessions last week, we heard about evolutions in deal financing and the increasing use of private credit to give greater flexibility on financing on deals, but then also the potential for lines between active and activist investor strategies to blur. Things like using press, social media, microsites to drive change. There was a whole debate on how this can evolve.

Giles Distin

Yeah, I mean, some similar themes that I have in mind. We've already mentioned IPOs, keeping an eye out for those. Obviously in interest rates, there might be a growing concern in relation to what is going on elsewhere in the world that interest rates will continue to rise and that might have an impact on M&A. And we've seen that pattern of big deals starting to return, including PE playing at that highest level.

Geopolitics, obviously that's in all of our minds at the moment. Active shareholders, we heard about those versus activism. And I think there's a sense that we have as M&A practitioners that we see more active and activist shareholders publicly playing in M&A situations from the sort of scenario of shareholders not supporting deals right up to truly active to be shareholders really trying to stop deals going through.

Julie Shacklady

Yeah, we heard about how you've got increasing use of all that increasing way that sellers are going directly to shareholders on transactions, which is part of that bucket.

Lucy Robson

Yeah, absolutely. I think in the transactions we're seeing, a huge number of those themes are ringing true and it feels as it's going to be an interesting end to the year, but plenty of things to be watching out for. 

Thank you both very much, that's been great. It will be really interesting to see how the rest of 2026 shapes up. Join us again next time on Mergerspresso and you can find us on Apple, Amazon and Spotify in the meantime.